Perfection of a Charge or Mortgage

Both charges and mortgages must be “perfected” in order to be valid against the borrower and its other creditors. To be perfected in Ireland, details of the charge or mortgage must be delivered to the Companies Registration Office (“CRO”) and registered within 21 days of creation of the security interest (different types of charges are filed on different forms, and a separate form must be filed for each charge). Failure to register the charge or mortgage within 21 days of its creation has the effect of making the charge void against a liquidator of the company and any creditor of the company.

If the CRO determines that the Companies Act requirements have been satisfied by the registration, it will issue a certificate providing conclusive evidence that the statutory requirements have been met. Once the charge or mortgage has been satisfied in whole or in part, details of the satisfaction should be filed with the CRO by the company that granted the security interest. The CRO will then notify the lender, who will have 21 days to object. If no objection is received then the satisfaction is deemed registered.

A charge or mortgage related to land requires the same type of filing with the CRO, plus an additional registration. In Ireland, registered land must be charged and unregistered land must be mortgaged. A charge over registered land must be filed with the Land Registry, and a mortgage over unregistered land must be filed with the Registry of Deeds. Although there is no time limit as to when the filing must take place, if another security interest is filed first, then the first to file will take priority.

With respect to intellectual property, a mortgage and/or charge can be taken over patents, and a charge can be taken over trade marks. Fixed charges over patents and trade marks must be registered within 21 days of the creation of the security by filing the appropriate form with the CRO. In addition, however, the security interest must be registered in each place where the patent or trademark is registered, including the Irish Patents Office and the European Patent Organization.